BFSI stands for Banking, Financial and Insurance sector. Generally, it represents a major portion of the Indian economy which comprises of all Banking Insurance and Non-banking institutions.
India, as a developing nation have always fostered the positives for the BFSI sector to flourish at an appreciable pace. Banking is one of the pillar components of the BFSI industry. It comprises of the following structure:
- Central Bank
In India, the Reserve Bank of India is the most designated Central Bank of the country. It holds the power to supervise the functioning of the national banking industry. It has the power to authorise the currency flow and to increase or decrease the same to check the inflation.
- Scheduled Commercial Bank
These banks are further classified into three types:
- Public Sector Banks
The banks wherein the government owns the majority stake and whose shares are listed on public exchanges are referred as Public Sector banks. Many public sector banks are merged under single pre-existing bank.
Some of these banks are Vijaya Bank, Dena Bank have merged into Bank of Baroda.
- Private Sector Banks
The banks where the majority stake is controlled by private shareholders are known as Private sector banks. In India there are around 22 active Private Sector Banks. Some of these banks are ICICI bank, Axis Bank.
- Foreign Banks
The banks whose headquarters are outside India are referred as Foreign Banks. The host countries gain dual benefits as foreign banks as they accelerate dealings in international transactions while increasing the employment scope in the banking sector. In total there are 45 foreign banks in India.
Due to the rising per capita income, expanding distribution, introduction of new products, networking and increasing customer awareness of financial products, the BFSI sector is growing exponentially. In the coming years, BFSI industry will continue to be a top priority industry for India’s economic development.
Technology Transformation in the Banking sector
The banking sector is one of the oldest businesses in the world and it is continuously progressing and growing with every year. Gone the days when banks used to be placed with long queues and tedious amounts of paperwork. Due to the technological advancements in the banking sector, the labor and the paper-use had reduced a lot. There are a lot more benefits also.
How Technology has changed the Banking sector?
- The complete world at your fingertips
In some or the other way, every one of us is affected by technology. Any work, be it ordering food, or shopping clothes, is just a click away. And on the additional note, all these things can be achieved simply by making a digital payment unlike carrying the complete wallet with you.
- Error-free and better data protection
Humans are more prone to make calculation errors. But now with the introduction of computers, the frequency of errors has reduced to almost nil. Today’s technology offers the complete security of your transactions and the safety of your data.
- Business Intelligence to drive more profits
The Reserve Bank of India has encouraged every Indian Bank to adopt Business Intelligence to increase the overall profitability in the industry. The system of Business Intelligence offers data for historical, current, and future trends. This technology has helped banks in a way such that they can take accurate decisions. Henceforth, these can bring an overall increase in productivity and profitability.
4.Smart work leading to better customer experience
During the old days, people need to stand in long queues, do a lot of paperwork, and need to be physically present to carry out the signatory works. The older system of banking has always been tiring which mostly ends in poor customer experience. Now with the arrival of net banking, people do not need to spend on banking-related tasks and at the same time, it also ensures a hassle-free customer service from a remote location.
These advanced technologies like AI will continue to drive transformation in the Indian BFSI sector. These technologies offer world-class banking experience for young customers and help you gain the right business insights.